BUYING OF LUXURIES.

New Zealand Herald, Volume LXII, Issue 19032, 1 June 1925, Page 8

BUYING OF LUXURIES.

Mr. Justice Frazer lias ample justification lor the note of warning he has sounded concerning the buying of luxuries. ' There is no need for alarm, but there is a clear call for caution. The situation disclosed at the end of the Dominion's financial year at March 31 last had some satisfactory features. A record export trade, registering a total value of £54,771,000, was accompanied by an imports total of * £49,720,000, which, although high, was not a record. However, the visible balance of trade gives no ground for reckless spending on imports. That balance was less favourable than the balances of the three preceding financial . years, which returned an excess of exports averaging £7,832,000. Even if comparison be made on what is generally regarded as the safer basis of annual periods ending oa Juno 30 —since they coincide more nearly with the Dominion's seasons of production—the tendency toward a less favourable balance is not falsified. No certainty attaches to the expectation that in the three months whose returns will complete this seasonal year there will be a compensating recovery. At best that is only a confident hope. What matters vitally is that the favourable margin of visible exports, even at the figure reached in the three preceding years, is not large enough to admit of any considerable increase in imports. For, as Mr. Justice Frazer suggests, there has to be found about £5,000,000 annually to meet the annual charges on external indebtedness. In view of that fact, the margin between exports and imports. is little more than sufficient. The possibility of a drop in wool prices adds impressively to the need for frugality. It- is now reported that there is a hold-over in the world's wool supply amounting to a million bales. If this be so, the likelihood of a drop in wool values, with its prejudicial effect on New Zealand's exports, cannot be safely ignored. The moral of such considerations is too obvious to be gainsaid. Spending on luxuries, which for the people of this Dominion means spending on imports, has indubitably had an appreciable effect

in endangering the country's favourable trade balance, and its continuance may bring embarrassment, not only to the spenders, but to everybody else in the Dominion. The tendency of luxuries to become necessities, inseparable from a rising standard of living, may be' easily allowed to go to excessive lengths. The desire for luxuries, over-reach-ing itself, may bring a time in which the purchase of apparent necessities becomes extravagance. Against that painful rebound a timely caution is the only safeguard.